Ameresco Inc (AMRC): Are Hedge Funds Right About This Stock?

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Ameresco Inc (NYSE:AMRC) was in 12 hedge funds’ portfolio at the end of the first quarter of 2013. AMRC has experienced an increase in activity from the world’s largest hedge funds lately. There were 5 hedge funds in our database with AMRC holdings at the end of the previous quarter.

To most market participants, hedge funds are viewed as worthless, old financial tools of the past. While there are greater than 8000 funds with their doors open today, we at Insider Monkey hone in on the elite of this club, around 450 funds. Most estimates calculate that this group controls the lion’s share of all hedge funds’ total capital, and by watching their highest performing equity investments, we have found a number of investment strategies that have historically outperformed Mr. Market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).

Equally as integral, optimistic insider trading sentiment is another way to parse down the financial markets. Just as you’d expect, there are a variety of motivations for an upper level exec to cut shares of his or her company, but only one, very clear reason why they would buy. Several academic studies have demonstrated the valuable potential of this strategy if shareholders understand what to do (learn more here).

Now, it’s important to take a gander at the key action surrounding Ameresco Inc (NYSE:AMRC).

What does the smart money think about Ameresco Inc (NYSE:AMRC)?

In preparation for this quarter, a total of 12 of the hedge funds we track were bullish in this stock, a change of 140% from one quarter earlier. With the smart money’s capital changing hands, there exists an “upper tier” of notable hedge fund managers who were increasing their stakes significantly.

Ameresco Inc (NYSE:AMRC)According to our comprehensive database, Chuck Royce’s Royce & Associates had the most valuable position in Ameresco Inc (NYSE:AMRC), worth close to $6.7 million, comprising less than 0.1%% of its total 13F portfolio. Sitting at the No. 2 spot is John A. Levin of Levin Capital Strategies, with a $2.2 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining peers that are bullish include Philip Hempleman’s Ardsley Partners, Israel Englander’s Millennium Management and John Overdeck and David Siegel’s Two Sigma Advisors.

As aggregate interest increased, key hedge funds were leading the bulls’ herd. Ardsley Partners, managed by Philip Hempleman, established the most outsized position in Ameresco Inc (NYSE:AMRC). Ardsley Partners had 0.7 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $0.7 million investment in the stock during the quarter. The following funds were also among the new AMRC investors: Ken Gray and Steve Walsh’s Bryn Mawr Capital, Brian Taylor’s Pine River Capital Management, and D. E. Shaw’s D E Shaw.

How are insiders trading Ameresco Inc (NYSE:AMRC)?

Bullish insider trading is most useful when the company we’re looking at has experienced transactions within the past half-year. Over the latest six-month time period, Ameresco Inc (NYSE:AMRC) has seen 2 unique insiders buying, and 1 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Ameresco Inc (NYSE:AMRC). These stocks are Coleman Cable, Inc. (NASDAQ:CCIX), Zoltek Companies, Inc. (NASDAQ:ZOLT), Capstone Turbine Corporation (NASDAQ:CPST), Preformed Line Products Company (NASDAQ:PLPC), and Electro Scientific Industries, Inc. (NASDAQ:ESIO). All of these stocks are in the industrial electrical equipment industry and their market caps resemble AMRC’s market cap.

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